Orica strikes acquisition deal, raises major cash
Wednesday, August 3rd, 2022
Mining solutions provider Orica has announced the acquisition of digital orebody intelligence business Axis Mining Technology for up to A$350-million.
The acquisition price would comprise an up-front cash component of A$260-million and a deferred earn-out payment of up to A$90-million, contingent on financial performance and other conditions.
To fund the acquisition, Orica on Wednesday also announced a A$650-million capital raise, with the company to undertake a fully underwritten share placement priced at A$16 a share, representing a 7% discount to its last traded price on August 2.
The placement would see some 40.6-million new shares being issued, representing 9.9% of Orica’s existing issued capital.
In addition, the company is hoping to raise a further A$75-million through a share purchase plan (SPP), allowing shareholders to subscribe for up to A$30 000 worth of additional new shares in the company.
The SPP will open on August 10 and close on August 26.
Orica told shareholders on Wednesday that the acquisition of Axis would accelerate the company’s own capabilities to support new mineral discoveries required for decarbonisation, as new mineral discoveries were increasingly located at greater depths and demanded more geophysics.
The company noted that Axis’ gold and copper exposure also accelerated Orica’s broader commodity mix objectives.
“We are extremely pleased to welcome Axis into Orica. This strategic acquisition further strengthens our existing Digital Solutions vertical and expands our orebody intelligence portfolio upstream,” Orica MD and CEO Sanjeev Gandhi said.
“Orica’s purpose is to sustainably mobilise the earth’s resources and achieving this starts with a better understanding of the orebody at the start of the mining value chain. I believe that Axis’ differentiated geospatial tools and instruments, combined with our existing suite of digital solutions will provide compelling orebody intelligence to customers and support the delivery of the industry’s first end-to-end solutions platform, from mine to mill.
“The integration of Axis’ technology and expertise will accelerate our ability to support our customer’s digital transformation efforts around the world, helping them to operate more efficiently, sustainably and safely.
“In addition to facilitating the acquisition, the equity raising will allow Orica to fund incremental trade working capital requirements arising as a result of global supply chain dislocations, and also provide additional balance sheet capacity,” Gandhi said